Sensex slips on profit booking

MUMBAI - A benchmark index for an Indian equities market Tuesday slipped from its intra-day highs as stocks first rose after only a 25 basis points hike in interest rates by the Reserve Bank of India, but later slipped sharply on profit booking.

Reserve Bank of India (RBI) Governor Duvvuri Subbarao hiked the repurchase or repo rate to 6.5 percent from 6.25 percent and reverse repo rate to 5.5 percent from 5.25 percent. Other rates like cash reserve ratio and statutory liquidity ratio remained unaltered.

The 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE), which opened at 19,227.42 points, was ruling at 19,219.67 points - up 69.01 points or 0.36 percent from its previous close at 19,151.28 points.

The Sensex had climbed 189.71 points post-rate hike to 19,340.99 points.

The 50-scrip S&P CNX Nifty of the National Stock Exchange too was in the green, trading 0.37 percent higher at 5,764.65 points.

Broader markets were ruling moderately higher with the BSE midcap index up 0.22 percent and the BSE smallcap index up 0.37 percent.

Banking stocks were among the top losers, having risen in the past few days in anticipation of a greater rate hike, while capital goods and metals scrips rose.

The market breadth was positive, with 1,463 stocks advancing compared to 1,228 scrips on the decline, while 110 stocks remained unchanged.

Among gainers on the Sensex were NTPC, Hindalco Industries, Sterlite Industries and L&T, while the losers included ICICI Bank, Tata Motors, HDFC Bank and M&M.

Other Asian stock markets were trading mixed with concerns persisting that high inflation would lead to central banks in the region tightening rates further.

The Japanese Nikkei closed 1.15 percent up at 10,464.42 points, while Hong Kong’s Hang Seng rose 0.39 percent to rule at 23,894.36 points.

However, the Chinese Shanghai Composite index was ruling 0.84 percent lower at 2,673.13 points.